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EU Discusses Including Leather and Footwear in New Environmental Rules. Billion-Dollar Exports from Brazil Could Be Blocked by Traceability Requirements.
Brazil is one of the largest global exporters of leather and footwear, moving billions of dollars every year. The sector employs more than 250,000 people directly and represents one of the pillars of the national manufacturing industry, with a strong presence in states such as Rio Grande do Sul, São Paulo, Ceará, and Bahia.
According to Assintecal and Abicalçados, Brazilian footwear exports totaled around US$ 1.2 billion in 2024, while leather and its derivatives exceeded US$ 2.4 billion, according to the CICB (Center of the Leather Industries of Brazil). The European Union is one of the main destinations for these products, with countries such as Italy, Spain, Germany, and France among the largest buyers.
But this strategic route may be about to face a new regulatory challenge.
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EU Discusses Expanding Environmental Rules
After approving the EUDR (European Union Deforestation Regulation), which comes into effect in December 2024, the European Union is already debating the possibility of extending traceability and environmental verification requirements to sectors such as leather and footwear.
The logic is simple: since cattle ranching is directly linked to leather production, there is pressure from lawmakers and NGOs for the material to also be included under the same rules as beef and soy.
This would mean that Brazilian exporters would need to prove that each batch of leather comes from animals not raised in illegally deforested areas.
The Risk to Billion-Dollar Exports
If the measure advances, the impact could be immediate. The Brazilian leather and footwear sector would have to create complex traceability systems, capable of identifying everything from the origin of the cattle to the tannery and the footwear industry.
For large exporters, adaptation may be possible with investments in technology and certifications. But small and medium producers, who make up the base of the chain, would face difficulties in meeting the new rules, risking the loss of international contracts.
According to estimates from Abicalçados, over 30% of footwear exports go to Europe. In leather, the European Union accounts for almost half of the sector’s revenue. If there are blockages or restrictions, losses could reach billions of dollars per year.
Experts Warn of Disguised Trade Barriers
Lawyers and economists point out that while the European narrative is about environmental protection, the measure could also serve as a non-tariff barrier to international trade.
Agricultural economist Marcos Jank states, “the European Union is imposing standards that few countries can meet. In practice, this works as protection for the internal market, weakening more competitive rivals like Brazil.”
International trade lawyer Tatiana Prazeres emphasizes: “If total traceability of leather is required, the adaptation cost will be high and could exclude thousands of small producers from the export chain.”
What Is at Stake for Brazil
The leather and footwear sector is already facing competitiveness challenges, such as the appreciation of the real at times, high tax burdens, and competition from Asian countries, primarily China, Vietnam, and Indonesia. With new barriers from the European Union, Brazil would need to accelerate investments in:
- Digital traceability systems, integrating livestock, tanneries, and factories;
- International environmental certifications, such as the Leather Working Group;
- Transparency throughout the production chain, from cattle raising to shipping.
Companies that do not comply may lose access to one of the most demanding and profitable markets in the world, opening space for global competitors.
Possible Scenarios for the Future
Adaptation with Technology – Large groups are investing in blockchain, satellites, and traceability platforms to ensure compliance.
Exclusion of Small Producers – Without support, thousands may be left out of the export chain.
Redirection of Markets – If Europe imposes stricter rules, Brazil may increase exports to Asia, the Middle East, and Latin America.
Legal Dispute – Brazil may challenge the measures at the WTO, arguing that they function as trade barriers disguised as environmental requirements.
A Red Alert for the Brazilian Industry
The possible new requirements from the European Union represent a red alert for Brazil’s leather and footwear industry. The sector, which generates thousands of jobs and billions in revenue, may face the biggest challenge in its recent history: proving total traceability in a complex and decentralized chain.
If it manages to adapt, Brazil could establish itself as a reliable supplier in a market that values quality and sustainability. But if it fails, it risks losing billions in exports and opening the door for global competitors.
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